Capital pool companies are traded on the TSXV but have no commercial operations and no assets other than cash. They are required to conduct a “qualifying transaction” – acquire assets, such as an active company, and begin commercial operations – within a certain time-frame.

If this deal goes ahead, it would be LW’s qualifying transaction.

The proposed stock-only deal would see LW acquire all of the outstanding shares of the privately-held Tweed. In exchange, the current owners of Tweed will receive to-be-issued shares that will give them just under 95 per cent ownership of LW.

LW has struggled to find a qualifying transaction. The company conducted its initial public offering in 2010, but was temporarily de-listed in the summer of 2012 after failing to find an appropriate investment.

The deal between LW and Tweed still requires the two companies to come to a definitive agreement and must be approved by the TSXV before it goes ahead.